We used to call it TRIA — the Terrorism Risk Insurance Act. It passed just after 9/11. At its first extension the name was modified as was the bill. So now it’s TRIPRA. Since the name change the insurance industry, and businesses large and small have worried that Congress won’t do an extension when it expires at the end of next year.
Worried about the same issue, House Financial Services Committee Chairwoman Rep. Maxine Waters has introduced a bill that will reauthorize the law. She calls it the Terrorism Risk Insurance Program Reauthorization Act of 2019. If it passes the House and then the Senate, Waters bill — H.R. 4634 —will add 10-years to the program.
It will be in force through 2030.
Waters’ bill has 27 co-sponsors and they cross party lines. It also has support within the insurance industry. PIA National has actively supported a long-term extension of TRIPRA. The association believes it to be important to insurers, business and consumers.
In testimony given to the Senate Banking, Housing and Urban Affairs Committee, PIA National made a strong argument for keeping the TRIP (Terrorism Risk Insurance Program) intact and renewed long-term.
“Any lapse in the program could cause serious damage to the United States economy and our national security,” PIA National said in its testimony. “Congress should provide a long-term extension of the TRIP to give certainty to policyholders and the markets. This program has succeeded due to, in part, industrywide participation, including participation by independent insurance agents.”
And whatever Congress does, PIA National says the program needs to remain affordable and something that all businesses — large and small — can access.
“Increases to cost thresholds, including higher deductibles or a higher share of losses over deductibles, could make this program cost-prohibitive for many insurers, and PIA National cautions against the inclusion of such provisions,” the statement to Congress said. “The TRIP fills a large void in the market and provides a level of certainty in an uncertain time. It is critical that Congress extend the TRIP before it expires on December 31, 2020.”
The American Property Casualty Insurance Association (APCIA) had nothing but praise for Congresswoman Waters and her bill. “We applaud Chairwoman Waters for introducing a bipartisan bill that would reauthorize TRIA for ten years in its current form,”APCIA CEO David Sampson said. “The time for Congress to act is now to avoid uncertainty and disruptions and confusion in the marketplace, similar to what we experienced after Congress failed to act in 2014.”
Marsh’s CEO John Doyle agrees.
“TRIPRA’s public-private partnership is instrumental in maintaining a vibrant marketplace by allowing insurers to provide adequate limits of terrorism coverage to the business community at affordable prices,” he said when he testified before the committee on Waters’ bill. “We strongly endorse a timely reauthorization of the program.”
The National Association of Insurance Commissioners (NAIC) wants an extension, too. Chlora Lindley-Myers — who heads the Missouri Department of Commerce and Insurance — testified at the hearing, too.
She said, “TRIP provides insurers with the certainty they need to offer coverage for acts of terrorism. Without TRIP, we are concerned that terrorism risk insurance would become unavailable and unaffordable and we could revisit some of the same market disruptions and economic uncertainties the nation faced in the aftermath of the September 11 attacks."
That’s also Doyle’s concern.“There is a strong possibility that if the federal backstop ceases to exist, we could see a domino effect of increased pricing across multiple insurance lines, not just terrorism, with a likely result of major marketplace disruption,” he told Waters’ committee. “This trend will intensify beginning in January 2020.”
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